Short term savings or overpay mortgage

Shinynewpenny

Long time lurked, first time poster so please excuse rookie question

I own my property, currently have around 128k left on 175k mortgage (latest valuation 240k). My partner moved in at the start of the year and we would one day like to buy somewhere together or extend. I'm currently using the money he contributes to overpay my mortgage, but I'm wondering if I would be better off saving, as am fairly certain I'll be going back to the mortgage company cap in hand when we look to buy somewhere else/extend.

5 year fix is up next summer. Has anyone got any advice to keep me on track?

Thanks
Penny

AnotherJoe

It doesn't make any difference financially if you paid £10k off the mortgage or saved £10k.
Youve still just got £10k extra towards the next house. So, whats your mortgage rate?
If its higher than you can get saving, overpay, otherwise save.


p.s. this assumes you also do have ready cash for expenses needed upfront. If you dont, accumulate some cash for those. Plenty of higher interest regular savers.

Shinynewpenny

Thanks, that helps! I do have an amount saved (c6k) which I keep for emergencies, but is in my regular current account.

Mortgage interest rate is 3.14% 31yrs and 10 months remaining (as per statement before any overpayments).

Really appreciate the advice
Penny

Thrugelmir

You may well struggle to earn over 3.14% on your savings. Overpaying by whatever you can afford makes sense. Particularly if a new property purchase is on the horizon.

Shinynewpenny

Thank you! I was just trying to get my head around it, as could potentially be asking to borrow same money back in future (And pay interest on it!)